Wall Street moved higher as the latest reports underpinned the view that the pace of recovery in the world's largest economy is gathering momentum.

Yesterday Federal Reserve Chairman Janet Yellen suggested US borrowing costs might begin rising faster than economists and investors had anticipated because of the US economy's strength.

Jobless claims rose by 5,000 to 320,000 in the week ended March 15, according to Labor Department data. The four-week average, a less volatile measure, declined to 327,000.

Separately, the Conference Board's index of leading indicators advanced more than forecast in February, climbing 0.5 percent, following a revised 0.1 percent gain in January. The Philadelphia Federal Reserve Bank's business activity index was at 9.0 in March, from 6.3 in February.

Even so, existing home sales fell 0.4 percent to an annual rate of 4.60 million units, according to the National Association of Realtors.

US policy makers yesterday also announced another US$10 billion downgrade to their monthly bond purchases, now reduced to a pace of US$55 billion a month.

"We're trying to decipher her timeframe and get ahead of it," Frank Davis, director of sales and trading at LEK Securities in New York, told Reuters. "While we didn't make any drastic changes to our positions as a result of what she said, we have a tight watch on her to figure out how she'll play her hand."

Gold suffered a drop as the Fed's confidence in the improving US economy decreased the appeal of the safe-having investment. Gold futures for April delivery 0.8 percent lower to close at US$1,330.50 on the Comex in New York.